Recently, the U.S. Supreme Court unanimously held that the FDCPA does not apply to debt purchasers collecting on its own debt. The decision was regarding Santander Consumer USA Inc. who was collecting on acquired defaulted loans from CitiFinancial Auto. The Court ruled that because the debt purchaser was not collecting on a debt “owed… another,” they were not subject to the FDCPA.

For our clients: Licensing is a state issue, and we will continue to monitor the state’s responses and notify our clients of any changes that would result in an impact to state licensing. There are many state-specific collection practices acts that will continue to apply to debt buyers. Please note this decision changes nothing for third party collectors.

June is a big month for license renewals for collection agencies, debt buyers, and attorneys. These license renewals can be complicated and time-consuming. States are continually changing their regulations and application requirements making it difficult to stay informed.

Make sure you’re prepared and don’t get caught without a license.

Here are four things you need to know as you prepare for license renewals:

Forms. States change forms often, so make sure you have the correct one(s).

Financials. Similar to forms, the financial information requested can change often as well. What is required this year can be completely different the next renewal cycle.

Collectors. Make sure you know exactly who needs to be registered as you’ll need this information when completing your renewal paperwork.

Bonds. Pay your premium when they’re due, and make sure you have the correct due date.

We know how complicated this process can be, especially with requirements changing so frequently. Our renewal services include tracking renewal deadlines, preparing all renewal paperwork, submitting all completed paperwork, and following up on the status of any submitted renewal applications.

We guarantee the prompt and timely submission and delivery of each renewal and annual report package to the appropriate state department. If we fail to meet the deadline and the agency has provided all necessary materials on a timely basis, we will pay any late fees that are incurred.

Reach out to us if you’d like to learn more about our license renewal services.

The New York Department of Financial Services (“NYDFS”) has issued new cybersecurity regulations that went into effect on March 1, 2017. New York Governor Andrew Cuomo described the new regulations as the “first-in-the-nation” to require cybersecurity protections for New York consumers from the ever-growing threat of cyber-attacks.

Many companies continue to struggle with the question of how far the NYDFS regulations will reach outside of New York and whether the NYDFS cybersecurity approach will become the de facto national standard in the absence of further action on the federal level. Covered entities, as defined in the new regulations, include any individual or non-governmental entity operating under a license, registration, charter, certificate, permit, accreditation, or similar authorization under New York banking, insurance, or financial services laws.

Under the new regulations, NYDFS expects covered entities to implement highly specific technical measures as part of a cybersecurity program to address cybersecurity risks “in a robust fashion,” such as hiring a Chief Information Security Officer (“CISO”), multi-factor authentication, encryption, penetration testing, and heightened reporting of “cyber security incidents” to NYDFS within 72 hours. These state-level requirements differ dramatically from the risk-based approach generally taken on the federal level. Early versions of the NYDFS regulations were even more prescriptive, but in the face of harsh criticism from industry participants, the final regulations permit financial institutions to tailor certain aspects of their cyber security program to reflect the company’s own risk assessment.

Financial institutions will need to move swiftly in preparation for the upcoming compliance deadlines established under the NYDFS regulations. Compliance with the NYDFS regulations should be taken seriously by the highest level in companies that are considered covered entities as someone from a company’s Board or senior management will be required to sign an annual certification confirming compliance with these regulations – the first such certification must be submitted no later than February 15, 2018. NYDFS urges, “all regulated institutions that have not yet done so to move swiftly and urgently to adopt a cybersecurity program” that complies with the minimum standards set forth in the new regulations.

Attorneys in Ballard Spahr’s Consumer Financial Services and Privacy and Data Security Groups can provide guidance on how to ensure compliance with the full range of state and federal privacy and data security laws and regulations impacting the consumer financial services industry. We regularly advise clients on the development and enhancement of risk-based information security programs, including conducting risk assessments and crafting comprehensive incident response plans.

In the collections industry paperwork, requirements and deadlines are a big part of the business. Compliance is key to remaining in good standing. We’re often asked about the difference in annual reports and license renewals.

First, we need to define both.

Annual Reports renew your certificate of authority registrations with each Secretary of State. These filings contain specific corporate information and must be updated each year (or two) to remain compliant.

License Renewals and the miscellaneous supplemental filings are the filings necessary to keep your debt collection licensing in good standing. If proper renewals are not filed, an agency will lose their ability to collect debt.

The primary difference is Annual Reports are filed with the Secretary of State while the License Renewals are filed with the appropriate licensing board allowing you to continue the business activity for which they were issued. Both of these actions are indeed required to remain compliant and in business. It’s important to submit both completed renewal applications and annual report applications to the appropriate state department in a timely manner along with all required documentation requested by the states.

Annual Reports are filed with the Secretary of State while the License Renewals are filed with the appropriate licensing board allowing you to continue the business activity for which they were issued.

Collection agency registrations and licenses are not a one-time filing! Renewal filings are due, in most cases, yearly with some occurring every few years. The complexity of compliance in part comes from deadlines. License Renewals happen at different times for each state and may have to be filed in multiple parts Many states have supplemental filings as well that if not filed, the underlying collection agency license is lost. Annual Reports also have deadlines separate and apart from the License Renewals. Not only do you have to be registered and licensed, you must also be up to date with renewal filings to collect debt. Additional complexity is added by way of states continually changing statutory regulations and application requirements making it difficult to stay informed. Let us not forget the importance of change notifications as well. When changes to your corporate structure occur (officer, collection manager, address, ownership etc.) there are statutory guidelines which must be met in order to avoid penalties, fines and loss of licensure.